axa asia: accelerate towards a leading position in … · axa asia: accelerate towards a leading...

Investor Day

November 7, 2012

AXA Asia:

Accelerate towards a

leading position in Asia

Mike Bishop CEO, AXA Asia

E2 – AXA Asia – November 7, 2012

Cautionary note concerning forward-looking

statements

Certain statements contained herein are forward-looking statements including, but not

limited to, statements that are predictions of or indicate future events, trends, plans or

objectives. Undue reliance should not be placed on such statements because, by their

nature, they are subject to known and unknown risks and uncertainties. Please refer to the

section “Cautionary statements” in page 2 of AXA’s Document de Référence for the year

ended December 31, 2011, for a description of certain important factors, risks and

uncertainties that may affect AXA’s business. AXA undertakes no obligation to publicly

update or revise any of these forward-looking statements, whether to reflect new

information, future events or circumstances or otherwise.


Today’s key messages

Our key differentiation factors are our composite play and our

bancassurance leadership position, which we will continue to leverage to

accelerate our growth

The HSBC deal in Property & Casualty and the ICBC partnership in Life &

Savings in China are transformational for our business

AXA Asia on track to contribute to the acceleration priority of the Group

Ambition AXA plan to double our size


Agenda

Asia is a growth engine for the Group

Ambition AXA to accelerate

Hong Kong Life, supporting the development in the region

South-East Asia Life, the acceleration engine

AXA Asia P&C, on track for leadership position in Asia

China, the new frontier

An integrated regional platform


AXA has established itself as a material player in

Asia in both Life & Savings and P&C…

Life & Savings regional ranking P&C regional ranking

In Euro billion In Euro billion

International insurers in Asia excl. Japan

1. Allianz APE include Japan.

Source: Company disclosures.

Note: AXA is pro forma of the AXA APH transaction

International insurers in Asia excl. Japan

Source: AXCO, AXA estimates

Note: AXA is pro forma of the HSBC transaction, incl. non-consolidated entities, incl.

South Korea direct business

1.8

Prudential 1.9

Aviva 0.4

Manulife 0.7

AXA 0.8

Allianz1 0.9

AIA

Allianz 0.9

AXA 1.2

Chartis 1.2

0.4

0.8

ACE

MSIG

Tokio Marine

0.6

GWP 2010 APE 2011


… in fast developing insurance markets…

Sources: Swiss Re sigma No 8/2003 for 2001, Swiss Re sigma No 3/2012 for 2011, AXA estimates for 2021E

Asia excl. Japan: Bangladesh, China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam

In USD billion

245

124

445

145

320239

655599

UK

~470

Germany

~310

Japan

~900

Asia excl. Japan

~1,800

Total insurance premiums

2021E 2011 2001


… and with significant growth potential

Significant under-insurance of mortality risk Underpenetrated P&C markets

Motor vehicles per 1,000 inhabitants Mortality protection gap, 2010, USD billion

This gap is measured as the difference between the income needed to maintain living

standards for a person’s dependents and the sum of savings and life insurance in force

available to them. Source: Swiss Re, 2011 Source: World Bank, 2009, Swiss Re, sigma No 3/2012

P&C premiums account for 2% of GDP in Asia excl. Japan,

vs. ca. 4% in Western economies

Strong fundamentals underpinning future growth

Amongst highest saving rates in the world

Low insurance penetration

Emergence of middle class and growing affluence

Absence of state welfare schemes

Divergent yet favorable demographics

711

380

533

Malaysia Thailand Indonesia India

6,676

China

18,745

1833477479

350

598

India Philippines China Hong

Kong

Indonesia Malaysia France


AXA Asia is already an important contributor to

the Group financial performance… (1/2)

Total 9M12: Euro 391 million1

2% of AXA Group P&C revenues

P&C gross revenues

Commercial non-Motor

45%

Personal Motor

36%

Commercial

Motor

12%

Personal

non-Motor

11%

Total 9M12: Euro 282 million

25% of AXA Group NBV

Life & Savings NBV

Mutual Funds

3%

G/A Protection & Health

63%

Unit-Linked

34%

G/A Pure

Protection

26%

G/A Protection w/ Savings

22%

G/A Health

15%

1. Including other revenues and eliminations


AXA Asia is already an important contributor to

the Group financial performance… (2/2)

G/A Protection

& Health

76%

G/A Savings

1%

Unit-Linked

16%

Total 1H12: Euro 176 million1

6% of AXA Group pre-tax underlying earnings

Well diversified earnings

Mutual funds

0%

P&C

7%

G/A Protection

w/ Savings

41%

G/A Health

5%

G/A Pure Protection

31%

Underlying earnings evolution

In Euro million

After an initial investment period, most AXA Asia

entities are now generating growing earnings

AXA APH minority interests

buy out on April 1, 2011

1. Includes Other Life & Savings products, which are excluded from the chart (Pre-tax

underlying earnings: Euro -8 million)

1H12

164

FY11

273

FY10

141

FY09

143

FY08

160

India & China Life

AXA Asia P&C

South-East Asia Life

Hong Kong Life


… with four growth drivers…

Generating strong earnings and cash flows, funding

the growth of the region

9M12 APE: €295m

1H12 Underlying Earnings: €119m

Remittance ratio: above 80% over 2008-2011

Hong Kong Life

Cash flow generator

Expected to fuel growth in the medium term

9M12 APE: €32m

1H12 Underlying Earnings: €-12m

China: ICBC-AXA Life

New frontier

Fast growing operations in Indonesia, Malaysia, the

Philippines, Singapore and Thailand

9M12 APE: €265m

1H12 Underlying Earnings: €50m

South-East Asia Life

Acceleration engine

P&C platform operating in China1, Hong Kong,

India1, Indonesia1, Malaysia, Singapore and

Thailand1

9M12 gross revenues2: €391m

1H12 Underlying Earnings2: €11m

AXA Asia P&C

Strong regional franchise

1. Not consolidated

2. Consolidated scope

1

4

2

3


All benefitting from an integrated regional

platform to attract new partners

China is the new frontier

Hong Kong Life is delivering growth and strong

earnings, supporting development in the region

South-East Asia Life is the acceleration engine,

where we leverage our leading bancassurance

proposition

AXA Asia P&C benefits from its diversified

strategy and is on track for the #1 position in

Asia post HSBC integration

… and the ambition to accelerate its development and strengthen its position

Efficiency Everywhere with a focus on mature

markets

Customer centricity

Selectivity

Acceleration

Efficiency

Customer

centricity

Trust &

Achievement

Ambition AXA 2010-2015


Agenda









Strong APE growth

NBV growth

Underlying earnings

Robust in-force book backed by strong growth

Bancassurance deal with Fubon will bolster growth momentum

Ca. Euro 600 million dividend upstreamed over 2008-2011, with a

remittance ratio above 80% on average

Historical persistency rates above 90%

#6 in the market1

In Euro million

Hong Kong Life Profitable growth steadily flowing through earnings

In Euro million

In Euro million

1. 2011. Source: Office of Commissioner of Insurance

330

112

FY11 FY08

295

243

9M12 9M11

208

75

FY11 FY08

166150

9M12 9M11

210

133

FY11 FY08

119

83

1H12 1H11

Note: AXA APH minority interests buy out on April 1, 2011 increased the group share


Agenda









APE

NBV

Underlying earnings

In Euro million In Euro million

In Euro million

South-East Asia Life The acceleration engine

281

60

FY11 FY08

265

206

9M12 9M11

123

19

FY08 FY11

10792

9M12 9M11

55

13

FY11 FY08

50

23

1H12 1H11

Competitive advantage

Well diversified distribution mix

Strong market positioning 1

#2 in Indonesia, #3 in the Philippines and #5 in Thailand

Strong partnerships based on strategic alignment and shared

economic interest, rather than up-front payment

Comprehensive product range to meet different needs of target

segments

1. FY11 for Indonesia and Philippines. 1H12 for Thailand. Sources: Indonesia Life Insurance Association (AAJI), Thai Life Insurance Association (TLAA), AXA estimates



2011

31%

2010

24% 33%

2009

20%

2011

2010

38%

2008

28%

2011

34%

2010

23%

2011

52%

2009

47%

2011

59%

2009

48%

Bancassurance (1/2) Outgrowing other distribution channels in Asia

… and is continuing to grow steadily Bancassurance is the main distribution

channel…

Agency

41%

Bancassurance

46%

Broker/IFA

3%

Others

10%

Source: Boston Consulting Group Analysis

1. Based on new business premiums. All data in 2010 except for Hong Kong, Philippines,

Vietnam in 2009 and China, Malaysia in 2008

Bancassurance share in life new business premiums (all insurers)

Hong Kong1 Thailand

Note: data not available beyond 2010 for Malaysia and before 2010 for Indonesia

Sources: Standard Chartered, 2012

1. Bancassurance universe includes BEA Life, BOC Life, China Life, Dah Sing Life, HK Life,

HSBC Life, MetLife and Prudential (assume 45% of new business is bancassurance)

Today in Asia, one out of two life insurance products

is sold through a bank

Malaysia India

Singapore Indonesia

Over the past years, bancassurance sales outgrew

agency sales across all countries

Life insurance distribution in Asia excl. Japan (all insurers)1


Joint-Venture with Metrobank,

the largest universal bank

24% market share of the

bancassurance market

450 AXA financial advisers

across 600 branches

Best in class productivity

Strong partners

Bancassurance (2/2) We are ideally positioned to capitalize on this trend

Joint-Venture with Mandiri,

Indonesia’s largest bank

#2 Life insurer

2,000 AXA employed financial

advisers across ca. 1,300

branches

Indonesia

#1 bancassurer

Joint-Venture with Krungthai

Bank, 2nd largest bank in

Thailand by assets

650 financial service

executives provide support to

9,000+ licensed bank staff

Thailand

Top 5 bancassurer

Acquisition of HSBC’s high

quality P&C business in Hong

Kong & Singapore

10-year exclusive P&C

distribution agreement in

Hong Kong, Singapore, India,

Indonesia & China1

AXA bancassurance APE growth

AXA’s competitive advantage in Asia

2011 APE bancassurance contribution %

In Euro million

Philippines

#1 bancassurer HSBC

AIA

9%

Manulife

13%

PCA (Prudential)

29%

AXA Asia Life

34%

Sources: Companies disclosure, AXA estimates

220225

99

9M12 FY11 FY10


1. Distribution agreements in India, Indonesia and China are still pending closing

http://www.hsbc.com/1/2/home


Attractive market

One of the fastest growing economies in the world – GDP growth at 6.5%

Low life insurance penetration – Premiums represent 0.9% of GDP

4th most populous country in the world – 238 million inhabitants

Indonesia Life #2 position in a fast growing market with the right partner

Strong APE growth In Euro million

Underlying earnings In Euro million

135115

9M12 9M11

154

26

FY11 FY08

30

15

1H12 1H11

35

10

FY11 FY08


Highly profitable business for AXA – NBV margin at 55% for 9M12


Thailand Life Balanced and diversified distribution platform

Total APE In Euro million

In Euro million

9M1

2

Bancassurance APE

Underlying earnings In Euro million

In Euro million

Agency APE1

Relentless focus on distribution excellence

1, Incl. Brokers and IFAs


90

61

9M12 9M11

18

3

FY11 FY08

15

9

1H12 1H11

42

22

FY11 FY10

43

30

9M12 9M11

42

24

FY11 FY10

47

31

9M12 9M11

84

19

FY11 FY08


Agenda









Ranking: #21

GWP: €45m

Ranking: #29

GWP: €39m

Ranking: #7

GWP: €157m

Significant growth to gain market share and scale

Development of expertise

India: growing 2 times the market rate

China: develop commercial lines in collaboration

with AXA Corporate Solutions

Profitable and generating dividends

Ambition to outgrow the market by leveraging

opportunities in commercial lines & health

Maintain leadership position while driving

efficiencies

Strategic

focus

AXA Asia P&C (1/3) Accelerating the transformation to consolidate our leadership position

Well established entities Developing entities

Countries

Rankings1

Premiums2

Ranking: #11

GWP: €129m

India

Ranking: #42

GWP: €20m

China

Ranking: #9

GWP: €73m

Hong Kong

Ranking: #2

GWP: €161m

Singapore

AXA Group

support

Reinsurance capacity and expertise provided by AXA Global P&C

Technical support and capacity with AXA Corporate Solutions for commercial lines development

Leveraging best practices in product development, notably in Personal non-Motor

Note: all data exclude the benefits of the HSBC transaction

1. 2011. Sources: Hong Kong Office of Commissioner of Insurance, MAS, ISM Statistical Bulletin on Market Performance Report 2011, Thailand Office of Insurance Commission , IRDA,

Indonesia Capital Markets and Financial Institutions Supervisory Agency, CIRC, AXA estimates

2. 9M12

Thailand Indonesia Malaysia


AXA Asia P&C (2/3) Well balanced financials between growth and earnings

GWP

FY11

CAGR: +8%1

419

FY09

264 322 391

+12%1

9M11 9M12

86 217

FY09

CAGR: +59%2

FY11

234162

+45%2

9M12 9M11

Accounting

treatment Consolidated Not consolidated

Combined

ratio

FY11

98.1%

FY09

97.2%

1H12 1H11

95.3% 97.8%

126.9%

FY09 FY11

114.8%

1H12

112.5%

1H11

118.8%

Well established entities Hong Kong, Singapore, Malaysia

Developing entities China, India, Indonesia, Thailand

In Euro million In Euro million

1. Change on a comparable basis

2. Change on a reported basis

Note: all data exclude the benefits of the HSBC transaction


AXA Asia P&C (3/3) HSBC: significant acceleration of our growth and earnings generation

Long-term P&C partnership with HSBC launched on November 5, 2012:

AXA acquired HSBC’s P&C businesses in Hong Kong and Singapore

10-year exclusive P&C bancassurance distribution agreement in Hong Kong, Singapore, India, Indonesia and China1

AXA: #29

Indonesia

AXA: #42

China

AXA: #11

India

Transaction scope overview

AXA: #9

HSBC: #1

AXA+HSBC: #1

Hong Kong

AXA: #2

HSBC: #15

AXA+HSBC: #2

Singapore

Accelerating profitable growth

Leading position:

AXA becomes the #1 P&C player in Hong Kong

AXA strengthens its #2 position in P&C in Singapore

Combination of strong growth and high level of

profitability:

HSBC mainly underwrites very profitable medical and

personal accident businesses, for both personal and

corporate clients

HSBC businesses provide multi-channel distribution

in Hong Kong and Singapore:

HSBC Bank branches

Strong agency network

Well established broker relationships

Diversification of AXA’s distribution platform in India,

Indonesia and China:

AXA will benefit from HSBC bancassurance agreement in

countries where existing P&C distribution is mainly agents

1. Distribution agreements in India, Indonesia and China are still pending closing


Agenda









Joining forces with ICBC

4 million corporate clients

16,232 domestic branches

World’s largest bank by market capitalization

282 million individual customers

Note: APE at 100%, based on local reporting. In AXA consolidated accounts, China APE is group share and

reported with a 3-month lag

In RMB million

Acceleration of APE growth after the Joint-Venture launch

China ICBC-AXA Life: a great alliance to create a leading brand in China

Source: Company website

343

137

193

1Q12 2Q12 4Q12E 3Q12

Launch of the new

Joint-Venture

X 2

X 2.5


Becoming the

preferred insurer

Where we are What we announced

Ambition to become the #1 foreign insurance

Joint-Venture in China by 2015

Ranked #7 amongst all foreign life insurers in

9M12 in terms of total premiums1

ICBC-AXA Life Insurance early achievements

Access to more than 5,000 of ICBC branches 4,407 ICBC branch relationships as of

September 2012

Implementation of our successful

bancassurance blueprint in these branches

while expanding our reach to cover the

remaining branches

Capturing a growing share of ICBC’s insurance

business

Implementing a

successful model

Accessing

ICBC network

Our Ambition

China ICBC-AXA Life: a great alliance to create a leading brand in China

Source: CIRC, AXA estimates


Agenda









AXA Asia A differentiated composite model

Integrated regional platform Our ambition

Access to a comprehensive product suite

Best in class time to market for product

launches

A single view of the customer across all

business lines

A strong unified brand across the region

Unit cost reduction

Top 3 Life & Savings international insurer in

Asia by new business

Leading Property & Casualty international

player in Asia

ONE AXA Asia :

ONE customer view

ONE brand

ONE operating platform / shared services

Top 3 Life & Savings international insurer in

Asia by new business

Leading Property & Casualty international

player in Asia


Today’s key messages

Our key differentiation factors are our composite play and our

bancassurance leadership position, which we will continue to leverage to

accelerate our growth

The HSBC deal in Property & Casualty and the ICBC partnership in Life &

Savings in China are transformational for our business

AXA Asia on track to contribute to the acceleration priority of the Group

Ambition AXA plan to double our size

axa asia: accelerate towards a leading position in … · axa asia: accelerate towards a leading...

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